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A Disclosure Letter works as a safeguard document in business deals and transactions across Singapore, spelling out important facts, potential issues, or exceptions about a company or asset being sold. It helps sellers protect themselves by revealing known problems upfront, while giving buyers a clearer picture of what they're getting into.

Common in mergers and acquisitions under Singapore's Companies Act, these letters typically accompany sale agreements and warranties. They cover everything from ongoing legal disputes to employee contracts, licensing matters, and property issues. By documenting these disclosures properly, both parties can move forward with more confidence and legal protection.

Use a Disclosure Letter when selling a business or significant assets in Singapore, particularly during mergers, acquisitions, or major investment deals. It becomes essential once you've agreed on basic transaction terms and need to protect yourself from future claims about undisclosed issues.

Timing matters - prepare this letter before finalizing your sale agreement, usually during the due diligence phase. Companies often need it when dealing with complex assets, multiple stakeholders, or regulated industries. It's especially important if your business has unique circumstances, pending litigation, or regulatory compliance matters that could affect the deal's value.

• General Disclosure Letters: Cover broad company information, financial statements, and operational matters - commonly used in standard M&A deals
• Specific Asset Disclosure Letters: Focus on particular properties, intellectual property, or equipment being sold
• Industry-Specific Letters: Tailored for regulated sectors like finance or healthcare, addressing unique compliance requirements under MAS or MOH guidelines
• Supplemental Disclosure Letters: Update or amend previous disclosures when new information emerges during negotiations
• Warranty-Linked Letters: Structured to directly correspond with warranty clauses in the main sale agreement

• Selling Companies: Draft and submit Disclosure Letters to protect themselves from future claims by revealing known issues
• Corporate Lawyers: Review and prepare the letters, ensuring comprehensive coverage and legal compliance
• Buying Companies: Review disclosures to understand risks and negotiate deal terms accordingly
• Company Directors: Sign off on disclosures and take responsibility for their accuracy under Singapore law
• Financial Advisors: Help identify material issues requiring disclosure and assess their impact on valuations
• Due Diligence Teams: Cross-reference disclosures against findings during their investigations

• Company Information: Gather all corporate records, financial statements, and key contracts from the past 3-5 years
• Due Diligence Review: Complete internal audits of operations, assets, and liabilities to identify disclosure items
• Warranty Review: Examine the sale agreement's warranties to ensure disclosures match each warranty clause
• Document Collection: Compile supporting evidence for each disclosure, including certificates, contracts, and correspondence
• Draft Organization: Structure disclosures by topic, using clear references to specific warranties
• Internal Verification: Have department heads verify disclosures in their areas before finalizing

• Introduction: Clear identification of parties, transaction details, and reference to the main sale agreement
• General Disclosures: Broad statements covering publicly available information and general company records
• Specific Disclosures: Detailed exceptions to warranties, organized by warranty number or subject matter
• Supporting Documents: List of all attached evidence and documentation referenced in disclosures
• Governing Law: Explicit statement that Singapore law governs the letter
• Authentication: Dated signatures of authorized representatives, company stamp, and witness details
• Bundle Organization: Numbered paragraphs and clear cross-references to disclosure documents

A Disclosure Letter differs significantly from a Disclosure Agreement in both purpose and legal effect. While both deal with sharing sensitive information, they serve distinct functions in business transactions.

• Purpose and Timing: Disclosure Letters are transaction-specific documents used during business sales to reveal issues about the target company. Disclosure Agreements establish ongoing confidentiality obligations between parties before sharing sensitive information.
• Legal Protection: Disclosure Letters protect sellers from future warranty claims by documenting exceptions. Disclosure Agreements protect the confidentiality of shared information and specify how it can be used.
• Duration: Disclosure Letters are permanent records tied to a specific transaction. Disclosure Agreements remain active for a defined period, often surviving the main transaction.
• Content Focus: Disclosure Letters list specific facts, issues, and exceptions. Disclosure Agreements outline confidentiality obligations, permitted uses, and consequences of breaches.